Naveen Jindal, chairman and managing director of Jindal Steel & Power, remained the highest-paid executive among the public listed firms in the country, pocketing Rs 67.2 crore or around $14.6 million for the year ended March 2011, even as the husband-wife duo of Kalanithi and Kavery Maran of the media firm Sun TV Network came close to match the figure.
During 2009-10, Jindal, a member of the Indian Parliament representing the Kurukshetra constituency for the ruling Congress party, had drawn around Rs 69 crore, including Rs 20.38 crore as payment for the previous year (2008-09) – making him the highest-paid executive for the first time who pipped the Marans.
Meanwhile, the couple from Sun TV, who had opted for a pay freeze the previous year, made it up with a massive 74 per cent pay hike to draw Rs 64.4 crore or $14 million each for the year ended March 2011. Both of them received Rs 10.86 crore in salary and Rs 53.54 crore as ex-gratia/bonus.
Bharti Airtel chief Sunil Bharti Mittal, Cadila Healthcare’s Pankaj Patel, JSW Steel’s Sajjan Jindal (who also happens to be the elder brother of Naveen Jindal), Hero MotoCorp's(formerly Hero Honda) Brijmohan Lall Munjal, Pawan Munjal besides two Honda representatives Toshiaki Nakagawa and Sumihisa Fukuda square up the list of top ten most paid executives of the public-listed firms across India.
Incidentally, majority of these top-paid corporate executives are also the promoters of their firms. Therefore, they also draw dividends from their companies, in addition to management remuneration.
Besides the Marans, Sunil Bharti Mittal, Sajjan Jindal, Debu Bhattacharya of Hindalco, Murali Divi of Divi's Lab and Amara Raja Batteries’ Jayadev Galla were the only ones among the highest-paid executives who took a pay hike last year.
In contrast, executives like Onkar Kanwar of Apollo Tyres, PRR Rajha of Madras Cement, Markand Bhatt of Torrent Power and N Srinivasan of India Cements took sharp pay cuts last year.
Put together, the top 25 most paid executives drew Rs 565 crore or around $123 million for the year ended March 2011, the same as their cumulative remuneration of the previous year, according to the VCCircle study. However, the study did not take into account the value of the stock options granted, as it is not mandatory to report it as per existing norms. However, just a few of these top honchos would have picked ESOPs, being promoter-directors themselves.
Incidentally, Mukesh Ambani, head of India’s most valued company Reliance Industries, does not figure in the top 10 list. After becoming the first Indian corporate chief to hit the annual compensation mark of Rs 44 crore (around $10 million) for the year ended March 2008, he had taken a voluntary pay freeze for the past three years at Rs 15 crore.
Heads Of Financial Services Firms
Globally, some of the highest-paid executives hail from the fund management industry. Indeed, Ashish Dhawan of ChrysCapital, one of the prominent names of Indian private equity, is among the highest income tax payers in the country. But a peek at the firms in the public-listed space gives a different picture altogether.
Take for instance, Archana Hingorani, CEO of India’s biggest home-grown private equity firm IL&FS Investment Managers Ltd. Hingorani, who heads a firm that has assets under management of around $3.2 billion, drew a pay packet of Rs 3.17 crore for the year ended March 2011. Compared to the previous year, this was 18 per cent lower, as her performance bonus declined from Rs 2.69 crore to Rs 1.68 crore.
Vishakha Mulye, who heads ICICI Venture, is another big name in the domestic PE space. And unlike Hingorani, her total remuneration almost doubled to Rs 1.85 crore last year. ICICI Venture had assets under management of $2 billion, as of March 2011.
For most of the PE firms in the country, it is not mandatory to disclose their executives’ pay and therefore, their pay packets cannot be compared. However, the bulk of the earnings of PE fund managers comes out of the ‘carry’ they receive from investments, which gets generated when these are liquidated.
Pay packets in the banking sector have been traditionally modest, compared to the rest of the corporate world. In India, they do not offer multimillion dollar pay packets in cash, but banks often make it up through attractive stock options.
For example, ICICI Bank, the largest private lender in the country, paid Rs 3.18 crore (including long-term incentives) to Chanda Kochhar, with a generous 53 per cent total pay hike. In addition, she also received 2.1 lakh stock options, the same as in the previous year. Also Aditya Puri, chief executive of HDFC Bank, received 15 per cent raise to draw Rs 3.91 crore last year.